Walmart to Go Small

Posted on March 31, 2011 by HFN Staff

By David Gill

Walmart Express, a 15,000 square-foot format, marks a new direction for the world's largest retailer as it seeks to recharge its U.S. business, according to Bill Simon, president and chief executive officer of Walmart U.S.

Speaking at last month's Bank of America Merrill Lynch Consumer Conference, Simon said the company will open pilot Walmart Expresses, both with and without pharmacies, in both urban and rural areas beginning in this quarter. "The aim here is to get the right model so we can rapidly roll these things out," Simon told the conference. "At our peak, we built about 350 supercenters in a year, so when we get this thing right, these are going to come real fast."

Walmart has thus started on the same path as its biggest rival, Target. The Minneapolis-based mass merchant unveiled CityTarget, a format measuring between 60,000 and 80,000 square feet and geared toward urban areas, in September 2010. The company plans to have CityTargets opened in Chicago, Los Angeles, San Francisco and Seattle in 2012.

Small formats are not entirely new to Walmart. Simon said the company has already opened its first Walmart on Campus, which includes food and pharmacy, on the campus of the University of Arkansas. He also said the company will rebrand its Neighborhood Markets, measuring from as little as 25,000 to 30,000 square feet to as much as 60,000 to 70,000 square feet, as Walmart Markets. He also cited formats such as Todo Dia in Brazil, Bodega Aurerra Express in Mexico and ChangoMas in Argentina, which, he said, were "among the most profitable businesses that these countries run."

Simon also spoke to the conference about Walmart's four-point plan to reinvigorate U.S. sales--which, as Mike Duke, the company's president and CEO, said in its most recent earnings statement, have been disappointing. The plan includes:

oRe-establishing leadership in everyday low prices

oDelivering the broadest assortment possible

oAggressively remodeling existing stores

oIncreasing access for shoppers through multichannel shopping options

"We like where we are going," Simon said. "We like the initial results and we know what we need to do--everyday low prices and broad assortment."